The equation of the smallest circle passing through the intersection of the line and the circle is
Form the equation of the circle based on given information
Equation of the circle passing through the intersection of the circle and the line is given as
comparing with standard equation of circle
,
Radius is calculated as
The value of is minimum when as we need the smallest possible circle.
Substitute in we get
Hence, is the equation of the smallest circle intersecting the given line and given circle, so, option is the correct answer.